Life crushed again as stocks nearly 6 1/2-year Low
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Copyright 2009 Inc.All rights reserved Marketwatch.com
MarketWatch
19 February 2009 Thursday 5:06 pm EST
SECTION: NEWS & COMMENTARY; Markets
LENGTH: 434 words
TITLE: life insurers that the new stocks crashed nearly 6 1/2-year low
Signed: Alistair Barr, MarketWatch mailto: ABarr@marketwatch.com.
Alistair Barr is a reporter for MarketWatch in San Francisco.
SAN FRANCISCO (MarketWatch) - Shares of life insurers fell again Thursday on the stock market fell nearly to the lowest level since October 2002.
Hartford Financial Services (HIG), a leading provider of variable annuities, has lost a quarter of its market value of nearly $ 7.73. Prudential Financial (PRU), one of the largest life insurance and annuity companies, fell by 16% to nearly $ 19.02.
Genworth Financial (GNW), Lincoln National (LNC) and Protective Life (PL) has lost more than 12%.
The Dow Jones Industrial Average fell 1.2% to 7465.95 Thursday. This is the lowest in almost six years, reaching to the depth reached in late November.
Life insurers are particularly sensitive to the exchange, in part because they sell products and retirement savings that are linked to the performance of equities.
Fitch Ratings downgraded Prudential Financial debt senior unsecured rating of A-to BBB and its commercial paper rating of F1 to F2, Thursday.
"Prudential has a high degree of sensitivity to equity markets through its life and variable annuity companies, shares in its status as operational entities, as well as the rest of its equity exposure to exploitation joint ventures in its international business management, "said Fitch.
The insurer also has above-average exposure to subprime residential mortgage-backed securities and securities backed by commercial mortgages, said the rating agency.
Prudential downgrade means the holding company can not participate in the Federal Reserve's Commercial Paper Funding Facility, or CPFF, who buys this type of short-term debt of companies that are struggling to refinance. Commercial paper must be rated at least F1 by a rating agency before the Fed is buying.
However, Prudential Funding LLC, a unit of Prudential, yet qualified for the program because Fitch lowered its rating to F1 from F1 +.
The loss of access to the program for the holding company for Prudential "is not positive, but far to say," the UBS analyst Andrew Kligerman said in a note to investors.
Prudential Financial has approximately $ 3 billion in debt maturing this year, but $ 2.6 billion in cash and other current assets, plus approximately $ 4.3 billion in bank credit facilities that committed he did not use, Kligerman said.
"Meeting the needs of the company's liquidity is not dependent on access to the commercial paper or debt markets," Bob DeFillippo, a spokesman for Prudential, said in a statement.
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LOAD-DATE: February 20, 2009
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MarketWatch
19 February 2009 Thursday 5:06 pm EST
SECTION: NEWS & COMMENTARY; Markets
LENGTH: 434 words
TITLE: life insurers that the new stocks crashed nearly 6 1/2-year low
Signed: Alistair Barr, MarketWatch mailto: ABarr@marketwatch.com.
Alistair Barr is a reporter for MarketWatch in San Francisco.
SAN FRANCISCO (MarketWatch) - Shares of life insurers fell again Thursday on the stock market fell nearly to the lowest level since October 2002.
Hartford Financial Services (HIG), a leading provider of variable annuities, has lost a quarter of its market value of nearly $ 7.73. Prudential Financial (PRU), one of the largest life insurance and annuity companies, fell by 16% to nearly $ 19.02.
Genworth Financial (GNW), Lincoln National (LNC) and Protective Life (PL) has lost more than 12%.
The Dow Jones Industrial Average fell 1.2% to 7465.95 Thursday. This is the lowest in almost six years, reaching to the depth reached in late November.
Life insurers are particularly sensitive to the exchange, in part because they sell products and retirement savings that are linked to the performance of equities.
Fitch Ratings downgraded Prudential Financial debt senior unsecured rating of A-to BBB and its commercial paper rating of F1 to F2, Thursday.
"Prudential has a high degree of sensitivity to equity markets through its life and variable annuity companies, shares in its status as operational entities, as well as the rest of its equity exposure to exploitation joint ventures in its international business management, "said Fitch.
The insurer also has above-average exposure to subprime residential mortgage-backed securities and securities backed by commercial mortgages, said the rating agency.
Prudential downgrade means the holding company can not participate in the Federal Reserve's Commercial Paper Funding Facility, or CPFF, who buys this type of short-term debt of companies that are struggling to refinance. Commercial paper must be rated at least F1 by a rating agency before the Fed is buying.
However, Prudential Funding LLC, a unit of Prudential, yet qualified for the program because Fitch lowered its rating to F1 from F1 +.
The loss of access to the program for the holding company for Prudential "is not positive, but far to say," the UBS analyst Andrew Kligerman said in a note to investors.
Prudential Financial has approximately $ 3 billion in debt maturing this year, but $ 2.6 billion in cash and other current assets, plus approximately $ 4.3 billion in bank credit facilities that committed he did not use, Kligerman said.
"Meeting the needs of the company's liquidity is not dependent on access to the commercial paper or debt markets," Bob DeFillippo, a spokesman for Prudential, said in a statement.
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LOAD-DATE: February 20, 2009
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